Oh Dear! Did the Trump Tax Cuts Really "Pay For Themselves"?

[WTF]

Originally Posted by Tiny

I'm pretty good with project economics, and otherwise am nowhere near in the same league with you and CM. Thanks though.

WTF has his occasional flashes of brilliance. And when he gets off onto other topics besides taxes and economics he's often a reasonable person.

His problem I think is that he doesn't think enough for himself and instead relies on news sources that cater to his prejudices. I view his quoting the Tax Foundation in one of his recent posts as a good sign.

Lol...you do not know how much your semi flaccid endorsement means to me!

Look...I'm no economist....but that does not mean I can't sniff out faux wanna be assholes, posing as an economist on a hooker board ....and your boy lusty is as phoney as they come.

He reminds me of the undergrad in Good Will Hunting who Matt Damon verbally pulverized in the bar scene in front of Ben Affleck and Mini Driver

[WTF]

Here is lustynut getting owned at the Harvard Bar...
https://youtu.be/lCvX1QA7FWQ



.

[Tiny]

Originally Posted by WTF

Lol...you do not know how much your semi flaccid endorsement means to me!

Look...I'm no economist....but that does not mean I can't still out faux wanna be economist....and you boy lusty is as phoney as they come.

He reminds me of the undergrad in Good Will Hunting who Matt Damon verbally pulverized in the bar scene in front of Ben Affleck and Mini Driver

Please note I changed "often a reasonable person" to "normally a reasonable person" before you posted. And you've got a good point. I do my best writing after a couple of Viagras.

[WTF]

Originally Posted by Tiny

Good point. The politicians totally fucked up the tax code. Some companies started recognizing most of their profits in tax havens, so they paid close to 0% rates. Others paid the full federal tax burden of 35%. If you're an exporter based in the USA and you're paying a 40% federal + state income tax rate, how do you compete with Europeans and Asians who have a 20% or 25% income tax rate?

The TCJA made the playing field more equal, with a new tax on "Global Intangible Low Taxed Income."

Ryan wanted to go further, and replace the corporate income tax with a kind of value added tax, that would be rebated to exporters, but it was not to be.

The TCJA was a good start. There are still lots of loopholes in the system that need to be removed. Perhaps that could enable us to lower taxes on the working man, pass through businesses, and investors.

We do agree that politicians are mostly bought and paid for by wealthy individuals and corporations, we can agree on that right?

So to give corporate America a free pass on a fucked up tax structure not entirely practical.

And to not ever take income inequality into account when writing tax policy is also almost felonious.

[Tiny]

Originally Posted by WTF

We do agree that politicians are mostly bought and paid for by wealthy individuals and corporations, we can agree on that right?

So to give corporate America a free pass on a fucked up tax structure not entirely practical.

And to not ever take income inequality into account when writing tax policy is also almost felonious.

No, we don't agree on all that. Yeah I believe special interests have gotten politicians to screw up the tax code beyond belief.

But your belief about income inequality and tax policy is totally backwards. The economist at the OECD who did the research to show the U.S. had the most progressive tax system in the OECD published a piece on Greg Mankiw's blog that has since disappeared. Or at least I can't find it anymore. He said you can attribute inequality to the way our government spends the money, not the way it taxes it. You've brought up the point several times about excessive spending on the military for example.

Rhetorical question: If we've already got the most progressive tax system of any developed country, including sales taxes and property taxes, how does it make sense to try to reduce inequality through changing tax policy?

If you want government solutions, the answer probably lies with the states, counties and municipalities. Improving school systems would be a great start. The federal government is inefficient and fucks up everything it touches. I suspect you can blame our out of control tuition costs on the feds for example, for the way they dumped money into student loans.

[WTF]

Originally Posted by WTF

We do agree that politicians are mostly bought and paid for by wealthy individuals and corporations, we can agree on that right?

Originally Posted by Tiny

No, we don't agree on all that. Yeah I believe special interests have gotten politicians to screw up the tax code beyond belief.

Whaaaaaaaat????? You do not agree and you think it is the fault of special interests?

Who pays for these special interests?

[WTF]

Originally Posted by Tiny

But your belief about income inequality and tax policy is totally backwards. The economist at the OECD who did the research to show the U.S. had the most progressive tax system in the OECD published a piece on Greg Mankiw's blog that has since disappeared. Or at least I can't find it anymore. He said you can attribute inequality to the way our government spends the money, not the way it taxes it. .

You've read cherry picked data from special intrest bloggers!

https://www.cbpp.org/research/what-d...ing-inequality

But to cite the report’s finding on the progressivity of the U.S. tax system while ignoring its other findings amounts to cherry picking and distorts the report’s overall findings. The report also shows that the United States does less to reduce income inequality than every other OECD country examined except Korea, when one considers both various taxes and cash transfer programs such as Social Security, unemployment insurance, and means-tested assistance programs.

[Tiny]

Originally Posted by WTF

You've read cherry picked data from special intrest bloggers!

https://www.cbpp.org/research/what-d...ing-inequality

But to cite the report’s finding on the progressivity of the U.S. tax system while ignoring its other findings amounts to cherry picking and distorts the report’s overall findings. The report also shows that the United States does less to reduce income inequality than every other OECD country examined except Korea, when one considers both various taxes and cash transfer programs such as Social Security, unemployment insurance, and means-tested assistance programs.

WTF, Greg Mankiw is not a special interest blogger by anyone's definition. He's one of the most respected economists in the country.

The Center on Policy and Budget Priorities is farther to the left than the Tax Foundation is to the right of center. Furthermore Huang and Frentz are not arguing the point that the U.S. has the most progressive tax system in the OECD. They cloudy the water by saying the 2008 study did not include consideration of sales taxes and the like, and probably intentionally fail to note that when you included those along with the very high value added taxes (VAT's) in other countries, our tax system looks even more progressive, relative to other countries. The standard VAT in the EU is 21%, and that, like our sales taxes, is steeply regressive.

Furthermore, what they are saying is consistent, based on my memory, with what the OECD economist wrote on Mankiw's blog. It's the way you spend the money that counts. They just argue that in addition to spending more on transfer payments to the worse off, you also need to raise more money through taxation so you can increase transfer payments.

So how that's going to go over? If you want a European style welfare system, you're not going to get there solely by taxing the rich a lot more. You're already taxing them more, proportionately to the middle class, than any developed country in the world. You're going to have to jack up rates on everyone. Do you think that has a snowball's chance in hell of happening? If you look at the TCJA tax cuts, they made individual income tax rates MORE progressive, by proportionately cutting rates on higher income earners less. Neither party is going to raise rates on anyone earning less than, say, $150,000 a year.

You need to give up. You can't win this argument because you're on the wrong side. You should head back over to the "How are we going to pay for all this shit" thread and opine on Afghanistan and the Soviet economy. You came up with an out-of-the-box answer that apparently bested Captain Midnight's answer to his own riddle.

[WTF]

Originally Posted by Tiny

Furthermore, what they are saying is consistent, based on my memory, with what the OECD economist wrote on Mankiw's blog. .

Are you reading the same article?




There are two main reasons for the United States’ comparatively poor performance in reducing inequality:

While the taxes that the OECD analysis examined are more progressive in the United States than in other OECD countries, they also are smaller (in terms of the revenue they collect) in the United States than the OECD average. The OECD report notes that the amount of revenue a tax system raises, as well as its progressivity, determines how effectively the tax system reduces income inequality. The taxes that the OECD report examined — federal and state individual income taxes (including refundable credits) and the employee share of payroll taxes — constitute a smaller share of household income in the United States than in the average of OECD countries for which there are data.
Cash transfers are smaller and less progressive in the United States than in other OECD countries. U.S. cash transfers are about half as large as the OECD average, measured as a share of household disposable income. Further, U.S. cash transfers are less progressive than those of the average OECD country. For these reasons, the OECD report shows that cash transfers do less to reduce household cash income inequality in the United States than in almost any other OECD country. (The OECD measure of cash transfers includes cash payments such as Social Security, unemployment insurance, and Temporary Assistance for Needy Families, as well as “near-cash” supports such as the Supplemental Nutrition Assistance Program, previously known as food stamps, and housing allowances.)[4]
As a result, the latest OECD data show that while the United States has the tenth-highest level of income inequality of the 31 OECD countries examined before considering taxes and transfers, it has the fourth-highest level of inequality after considering them.[5]

[Tiny]

Originally Posted by WTF

Are you reading the same article?




There are two main reasons for the United States’ comparatively poor performance in reducing inequality:

While the taxes that the OECD analysis examined are more progressive in the United States than in other OECD countries, they also are smaller (in terms of the revenue they collect) in the United States than the OECD average. The OECD report notes that the amount of revenue a tax system raises, as well as its progressivity, determines how effectively the tax system reduces income inequality. The taxes that the OECD report examined — federal and state individual income taxes (including refundable credits) and the employee share of payroll taxes — constitute a smaller share of household income in the United States than in the average of OECD countries for which there are data.
Cash transfers are smaller and less progressive in the United States than in other OECD countries. U.S. cash transfers are about half as large as the OECD average, measured as a share of household disposable income. Further, U.S. cash transfers are less progressive than those of the average OECD country. For these reasons, the OECD report shows that cash transfers do less to reduce household cash income inequality in the United States than in almost any other OECD country. (The OECD measure of cash transfers includes cash payments such as Social Security, unemployment insurance, and Temporary Assistance for Needy Families, as well as “near-cash” supports such as the Supplemental Nutrition Assistance Program, previously known as food stamps, and housing allowances.)[4]
As a result, the latest OECD data show that while the United States has the tenth-highest level of income inequality of the 31 OECD countries examined before considering taxes and transfers, it has the fourth-highest level of inequality after considering them.[5]

Please put two and two together WTF. The writers are not seriously disputing the fact that the USA has the most progressive tax system in the OECD. If the U.S. position in the rankings changes after considering taxes and transfers, then what's to blame? The progressivity of the tax system, which is already the most progressive in the developed world, or the nature of the transfers? Please see the text highlighted in bold above.

Yes, again, as I essentially said, if you want to jack up taxes a lot on everyone, and then allocate transfers so they help the worse off among us more, you will decrease inequality. You may however in the process make everyone worse off, albeit more equal. The middle class in America is better off than the middle class in Europe, in large part because we leave more money in the productive private sector. The only exceptions are Luxembourg, Norway and Switzerland. Luxembourg is small (600,000 people). Norway is a Petro State, like Abu Dhabi and Kuwait. And Switzerland, like the USA, doesn't tax the hell out of its citizenry or businesses.

[WTF]

Originally Posted by Tiny

Please put two and two together WTF. The writers are not seriously disputing the fact that the USA has the most progressive tax system in the OECD. .

They were pointing out the % or size to the part of our tax system that is progressive!

I'm not sure why you are having trouble with that point.

All countries have multilayered tax points.

We may have the most progressive Federal tax of all countries but if that portion is smaller than other countries, it really isn't all that progressive over all.

[Tiny]

Originally Posted by WTF

They were pointing out the % or size to the part of our tax system that is progressive!

I'm not sure why you are having trouble with that point.

All countries have multilayered tax points.

We may have the most progressive Federal tax of all countries but if that portion is smaller than other countries, it really isn't all that progressive over all.

Satan and Paul Krugman have hardened your heart. But there is salvation for all God's children. So I keep trying.

Comparison of progressivity is done with mathematical calculations. You split the population up into deciles or whatever and then divide the average tax rates for the higher deciles by rates for lower deciles and compare between countries. The average rate is the total tax paid divided by the total income for the decile. So I don't understand your last sentence.

Maybe this will help. In Germany, once you hit $61,500 per year in income, your marginal tax rate is 42%. And you indirectly pay a 19% value added tax on the things you buy. In Texas, which has no state income tax, the marginal rate at $61,500 is only 22%. Sales tax is about 9%. So you're roughly going to have to double taxes on someone making $61,500 per year to get to where Germany is.

The marginal rate maxes out in Germany at 45%, at $292,000. In Texas, it maxes out at 37% to 40.8%, depending on the nature of the ordinary income. I pay at a marginal rate of 40.8%. To put me at the German level you'd only be able to increase my marginal rate by 10%.

The maximum capital gains and dividend tax rate in both countries is about the same, 23.8% in the USA and 25% in Germany, although the U.S. capital gains and dividends rate schedule is much more progressive than Germany's.

In other words, if you want a tax system like Germany's, you're going to have to raise taxes a lot more on the middle class than on the well off. There would be hell to pay for any politician who tried to double the income tax rate and the sales / VAT tax rate on the middle class.

[Lucas McCain]

Anybody ever heard the phrase, "we'll just have to agree to disagree" and you just leave it at that because the back and forth is not going anywhere? LOL

[Why_Yes_I_Do]

Originally Posted by Lucas McCain

Anybody ever heard the phrase, "we'll just have to agree to disagree" and you just leave it at that because the back and forth is not going anywhere? LOL

And apparently, neither are you. I just figured it was their private room and didn't want to barge in. Did you have a VIP reservation or something? Besides, you are infringing on my rights to be a Peeping Tom in this venture.

[Tiny]

Originally Posted by Lucas McCain

Anybody ever heard the phrase, "we'll just have to agree to disagree" and you just leave it at that because the back and forth is not going anywhere? LOL

You're right. This has been going on for years. I'm just going to have to resign myself. WTF drank the Kool Aid, and there's no going back. He showed a lot of promise at one time. He even voted for Gary Johnson. Alas, another soul lost to Paul Krugman.